Priority Interrupt by Steve Ciarcia I'll Stay on the Ground, Thank You!

I’d like to think that the public and the airline industry would have come to its senses long before the events of last September but maybe that’s what it took. Yes, air travel is down, flights have been cut, and airline stocks are in the tank. It’s easy to correlate it all to security but I think the cause started long before September 11, 2001. Many of us wonder if long-distance travel is worth the hassle. Security delays are but one more item on the list of reasons against it. In truth, if the average business traveler was starting to think like me, it spelled big trouble already. The problems in the air travel industry were brought on by years of neglecting fundamental business logic. Recent events might have provided a catalyst for companies and consumers to better analyze travel necessities, but continually decreasing the convenience/cost/benefits of air travel would have demanded a commonsense reckoning eventually. Travelers can only take so much abuse in the name of low-cost flights. For too long, the airline industry has had a “sale” mentality where volume and not service was the only objective. Although it creates intermittent spikes in revenue, this pricing strategy has virtually no chance of success. The first thing a retail business does when it senses trouble is put everything on sale to boost revenues. If that sale price is too low, the sale will succeed but profitability will suffer. Do you make the sale price more attractive and sell twice as much the next time? The reasoning is, “We’re only losing a few dollars on each sale, but we’ll make it up in volume.” Consumers, and I have to presume the airlines too, think that there is no piper to pay for continuing this rat race. When the cost of airline travel competes with buses and trains, it doesn’t take a genius to predict that we’ve hit a critical price level. Even if services can be further reduced to compensate, the inter-linked infrastructure of air travel demands a minimum profitability or both safety and convenience are lost. It’s no big deal when a Greyhound bus gets a flat tire, but when you spring a leak at 30,000 feet you just can’t coast into the breakdown lane. A lot has changed in the past 10 years and when it comes to handling people, let’s face it, airlines do a lousy job. By the time you board a plane these days, you aren’t a happy camper and all you can think about is how much happier you’ll be when it’s over. It’s not like going to Disney World where they understand the science of traffic management. By design or default, more of us are looking at the convenience/cost/benefits issue when it comes to travel. I, for one, had already hit my limit. The continued degradation of product service, regardless of how wonderfully inexpensive airline tickets seem, hardly makes up for the masochism necessary to avail yourself of such services these days. After you sit on the runway for three hours because of equipment problems, land at the airport and wait two hours to deplane because some idiot went out the wrong security door, try not to faint from hunger because “food service” now means two cookies and a diet Coke, put in a claim for the luggage that apparently never made it onto the flight, miss the meeting and try to book a new return flight even though most are now canceled, you then have scurry for a hotel reservation because now you’re stuck. Tomorrow, you get to start the whole process over again! The airfare pricing structure undoubtedly contributes to how this is all playing out. As you probably already know, just about everyone on the same plane pays a different fare. The price you paid depends on whether you bought the ticket online, through an online wholesaler, through an agent, just before boarding, 14-days ahead, under a full moon when the tide was high, and so on. The thing the airlines had going for them was that just enough business people were buying the higher fare immediate-purchase tickets. I can’t speak for the majority, but I’m not willing to just jump on a plane these days. If anything good has come from our sudden travel awareness, it’s that at least this question is being asked by people at both ends of the trip. Everyone is looking for alternatives to business air travel. Fortunately, today’s technology offers many alternatives. Coupled with a personal telephone call or two to put a face on the communication (or at least an ear), e-mail has already revolutionized a lot of our business activity. Because of its efficiency, e-mail has become an accepted means of business development and support. Face-to-face meetings are still important, but their frequency has been mitigated by e-mail. The future, of course, is virtual face-to-face teleconferencing. Although there is a lot of it already going on, the costs are still relatively high. When teleconferencing becomes as ubiquitous as e-mail and teleconferencing hardware as simple as a camera on your desk, then we’ll have a true alternative to today’s air travel rat race. In my opinion, the air travel business has a bigger issue. Air carriers have to figure out a pricing strategy that better balances people’s desire to travel at a reasonable cost and convenience with the rational necessity of doing it at a profit. Experience has demonstrated that when airlines lose money their service suffers and customers feel neglected. The retail industry has a solution for this predicament. It’s to raise the price and pamper the customers.

steve.ciarcia@circuitcellar.com

Published: January-2002